Q: My mother is getting on in years, and had an attorney draw up a power of attorney so I could handle her financial affairs for her. I'm a little overwhelmed by trying to figure out what to do next. Do I move all her money into a checking account for easy access? How do I plan for bigger expenses, like if she has to go into a nursing home?
A: There are few things more confusing than having to jump into the middle of someone else's financial affairs, but if you take it one step of a time, it will soon become fairly routine. Here are five steps to take:
- Identify your mother's accounts. This includes bank accounts and also investment accounts. You don't necessarily have to keep all her money in a checking account, but as CDs mature you might want to direct the proceeds into savings accounts, where the money can be accessed without penalty.
- Get authorized on her accounts. Visit her bank or banks, present the power of attorney, and have them authorize you to give instructions on all of her accounts.
- Get a handle on her income and expenses. Go through past checking account statements so you know enough about her income and expenses to form a budget.
- Establish a routine for handling her mail. This is a good fail-safe to make sure she hasn't forgotten to tell you about any accounts that exist, or bills that need to be paid.
- Start to learn about financial aid options. Find out how Medicaid might help if her assets are seriously diminished, and also look into possible VA benefits if she is a military veteran or the widow of one.
Remember, if someone chose you for this responsibility, it means they trust you and are confident you can handle it. Now all you have to do is prove them right.
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